David Munoz v Deltec Internatioanl Group et Al Coram Richards J

• Jurisdiction: Cayman Islands
• Judge: Justice Cheryll Richards
• Judgment Date: 08 January 2019
• Court: Grand Court (Cayman Islands)
• Docket Number: CAUSE NO: G 0222 OF 2018
• Date: 08 January 2019

Between:

David Muňoz

Plaintiff

and

Deltec International Group

First Defendant

International Financial Services Group

Second Defendant

Hold and Opt Investments Limited

Third Defendant

Mercurio Limited

Fourth Defendant

Before:

The Hon. Justice Cheryll Richards Q.C.

CAUSE NO: G 0222 OF 2018

IN THE GRAND COURT OF THE CAYMAN ISLANDS

CIVIL DIVISION

HEADNOTE

Civil Division — Grand Court Rules — GCR O.11 — Leave to serve outside the jurisdiction.

Appearances:

Ms. Natasha Partos of Campbells for the Plaintiff

IN CHAMBERS

REASONS FOR DECISION

1 This is an ex parte application made by the Plaintiff pursuant to GCR 0.11 for leave to serve the Third and Fourth Defendants outside the jurisdiction. The application is made by summons filed on the 22 ^nd November 2018.

2 On the 16 ^th November 2018, the Plaintiff filed a writ of summons against the four Defendants. The First and Second Defendants, Deltec International Group and International Financial Services Group are exempt companies registered in the Cayman Islands. The Third and Fourth Defendants, Hold and Opt Investments Limited and Mercurio Limited are companies which are registered in the Bahamas.

3 The Plaintiffs claim arises from the termination of his employment by the First Defendant on the 31 ^st July 2018, breach of an oral employment agreement made 18 ^th July 2018 by the Second Defendant and the alleged wrongful issue of a loan default notice by the Third and Fourth Defendants on the said 31 ^st July 2018.

4 The ex parte application is supported by the Second Affidavit of the Plaintiff dated 4 ^th January 2019 1. The Plaintiff details therein the basis for his belief that he has a real issue to be tried before the Grand Court.

5 The Plaintiff states that there is a close connection among all four Defendants, as the beneficial owner of the Third Defendant, Mr. Jean Chalopin is the Chairman and 45% shareholder of the First Defendant and is also the largest shareholder of the Second Defendant. The beneficial owner of the Fourth Defendant, Mr. Gustavo Vollner is also the second-largest shareholder of the First Defendant and a large shareholder of the Second Defendant. Mr. Chalopin was the principal of the First, Second and Third Defendants, the agent of the Fourth Defendant and the person with whom the Plaintiff communicated in respect of the relevant agreements.

6 The Plaintiff commenced employment with the First Defendant as its CEO on the 4 ^th September 2012. The entity is in the business of private banking with an office in the Bahamas. His employment agreement stated that the governing law was the law of the Cayman Islands. The agreement was extended by an addendum dated 1 ^st April 2016 which extended the term of employment until it was terminated by either party.

7 The Plaintiff asserts that as part of his employment arrangements, he was offered, and later received, a loan from the Third and Fourth Defendants of US$1 million ($500,000.00 from each entity), in order to purchase shares in the First Defendant. This, the Plaintiff states in his statement of claim filed 19 ^th December 2018, was as an inducement for him to accept employment with the First Defendant and was also to compensate him for foregoing restricted shares with his previous employer.

8 A loan agreement was entered into on the 15 ^th May 2014 and comprised a Security Agreement and a Secured Loan Agreement. Both agreements which are attached to the Second Affidavit of the Plaintiff state that the governing law is the law of the Cayman Islands.

9 The Secured Loan Agreement required the payment of interest on the loan on a quarterly basis. The Plaintiff states that this was varied by oral agreement with Mr. Chalopin to the effect that the interest accruing under the Loan Agreement would only become payable at the end of the term of the loan. Between the date of the loan and the 31 ^st July 2018, in accordance with that oral agreement, the Plaintiff did not make any payments of interest on the loan and neither the Third nor Fourth Defendant requested same of him.

10 In July 2018 the Plaintiff had discussions with Mr. Chalopin as to the sale of his shares in the First Defendant and the termination of his employment but they could not agree on the value of his shares.

11 The Plaintiff's employment was terminated without notice on the 31 ^st July 2018 and on the same day he received a default notice from the Third and Fourth Defendants. The default notice indicated that the Defendants intended to re-register the shares held by the Plaintiff in the First Defendant into the names of the Third and Fourth Defendants.

12 The Plaintiff believes that this notice is invalid because he was not in breach of the Loan Agreement, given the oral agreement...